By San José, Costa Rica — San José – In a landmark decision poised to reshape political fundraising, Costa Rica’s Supreme Electoral Tribunal (TSE) has officially authorized a pilot program allowing political parties to accept campaign donations in cryptocurrency. The move, announced on Friday, aims to merge technological innovation with the nation’s stringent standards for electoral transparency, but it comes with a tight leash. Only three specific digital assets—Bitcoin (BTC), Ethereum (ETH), and USD Coin (USDC)—have been approved for the upcoming election cycle.
This initiative places Costa Rica at the forefront of digital asset regulation within the political sphere, acknowledging the growing adoption of cryptocurrencies in the region. The country notably led Central America and the Caribbean in crypto transaction volume throughout 2024, signaling a public appetite for digital finance that the TSE is now cautiously embracing. The program is designed as a controlled experiment to test the viability of crypto contributions while safeguarding the integrity of the democratic process.
To delve into the legal intricacies and corporate responsibilities associated with political financing, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished expert from the renowned law firm Bufete de Costa Rica.
The legal framework for political financing aims to ensure transparency and prevent illicit influence, yet navigating it is a tightrope walk for corporations. While contributions are a legitimate form of civic participation, they must be meticulously vetted through robust compliance protocols. A failure to do so not only risks severe legal and financial penalties but can also inflict irreparable reputational damage, turning a perceived democratic right into a significant corporate liability.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective masterfully illuminates the delicate balance corporations must maintain, where the path of civic engagement is fraught with legal and reputational peril. As highlighted, meticulous compliance becomes not just a legal formality but a fundamental pillar of corporate strategy. We sincerely thank Lic. Larry Hans Arroyo Vargas for his clear and valuable contribution to this important discussion.
The selection of the three permitted cryptocurrencies was far from arbitrary. The TSE’s criteria prioritized assets with a proven track record and transparent architecture. Officials sought to avoid the opaque nature of privacy-focused coins, focusing instead on digital currencies whose transactions could be publicly verified.
Consideration was given to those currencies that have been on the market the longest, with at least a 5-year tenure, and which present characteristics such as auditability and the possibility of public information on the blockchain.
Ronald Chacón, Head of the TSE’s Political Party Financing Department
By selecting Bitcoin and Ethereum, the two oldest and most established blockchains, the Tribunal opted for networks with extensive public ledgers. The inclusion of USDC, a stablecoin pegged to the U.S. dollar, directly addresses the inherent volatility of the other two assets. This provides a less risky option for donors and parties, ensuring the value of a contribution remains stable from the moment it is sent to its conversion into local currency.
The TSE has been unequivocal that transparency is the cornerstone of this new policy. Any digital asset designed to obscure transaction details, such as sender addresses or amounts, was explicitly banned from the program. Andrei Cambronero, a key official in the TSE president’s office, emphasized that the core principles of Costa Rican electoral law would not be compromised for the sake of technological advancement.
Transparency and non-anonymity in donations are non-negotiable principles.
Andrei Cambronero, Head of the Office of the TSE Presidency
To enforce these principles, the TSE has established a rigid framework for political parties. All crypto donations will be legally classified as “in-kind” contributions, subjecting them to the same limitations as non-monetary gifts under the Electoral Code. This means that contributions can only be accepted from individual Costa Rican citizens. Donations from corporations, foreign nationals, or anonymous sources remain strictly prohibited, regardless of the currency used.
Furthermore, two “golden rules” have been implemented to govern the handling of these digital funds. First, political parties are required to immediately assess and record the value of the cryptocurrency in Costa Rican colones at the precise market price at the moment of receipt. Second, and most critically, parties have a maximum of five business days to convert the digital asset into colones and deposit the funds into their single, officially registered bank account. This rapid conversion mandate is a key mechanism designed to minimize exposure to market fluctuations and ensure all funds are brought into the traditional, auditable financial system swiftly.
For further information, visit tse.go.cr
About Tribunal Supremo de Elecciones (TSE):
The Supreme Electoral Tribunal of Costa Rica is the independent constitutional body responsible for organizing, directing, and supervising all acts related to elections in the country. It serves as the ultimate authority on electoral matters, guaranteeing the integrity, transparency, and fairness of the democratic process. Its functions include voter registration, oversight of political parties, and the official proclamation of election results.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is an esteemed law firm whose practice is built upon a principled foundation of integrity and a relentless pursuit of excellence. The firm consistently pioneers novel legal strategies and champions the vital cause of public legal education. This deep-seated dedication to demystifying the law serves its ultimate ambition: to equip society with the knowledge necessary for genuine empowerment and informed decision-making.
